T-Mobile beats phone subscriber estimates as lockdown creates demand surge

(Reuters) – T-Mobile US Inc (TMUS.O.

ARCHIVE PHOTO: A T-Mobile logo is seen outside a store in Manhattan, New York, USA, April 30, 2018. REUTERS / Shannon Stapleton

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The telecom operator said it was confident it would emerge strongly from the pandemic, as it hopes to attract customers from rivals with its lower-priced services.

However, the company did not give an outlook for the entire year, citing uncertainties related to the pandemic, following the steps of its competitors AT&T Inc (T.N) and Verizon Communications (VZ.N)

The shares rose 0.60% in post-market trading.

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T-Mobile added 452,000 new net monthly paid telephone subscribers in the first quarter, above analysts' estimates of 426,000, according to research firm FactSet.

The company's postpaid phone turnover, or customer cancellation rate, in the first quarter was 0.86%, compared to 0.88% last year, reflecting store closures and home stay orders. all over the country.

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As millions of people in the United States lost their jobs, T-Mobile's chief executive Mike Sievert said he expected customers on a limited budget to be attracted to the company's services.

"I hope that AT&T and Verizon customers will certainly look to get out of their high monthly bills in search of better value," said Sievert during a conference call.

The company recorded a marginal increase in revenue to $ 11.1 billion from the previous year, but lost expectations of $ 11.4 billion.

T-Mobile had closed 80% of its stores to comply with the blocks. However, an increase in service revenue offset the drop in demand.

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The company said it was expanding its 5G distribution as demand continues to rise during the blockades and that it built more than 1,000 network sites in April. T-Mobile's chief technology officer, Neville Ray, said the network is "growing like a weed".

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The report was the first since T-Mobile closed its $ 23 billion merger with Sprint Corp in April and changed its executive leadership.

The company said the coronavirus pandemic will continue to have a negative impact in the second quarter while integrating the Sprint network.

T-Mobile expects to add up to 150,000 net monthly telephone subscribers in the second quarter. The company said its merger-related costs would range from $ 500 million to $ 600 million before tax and its COVID-19 pandemic costs would be between $ 450 million to $ 550 million before tax.

Last week, T-Mobile said in a preliminary report that Sprint lost 348,000 monthly phone subscribers in the first quarter, more than double the amount of Sprint subscriber losses compared to last year.

The document also said that Sprint defines subscribers differently than T-Mobile and that Sprint's results would be substantially lower once T-Mobile's reporting policies were applied. Sprint's independent results for the first quarter are expected to be released in May.

Reporting by Anirban Sen and Neha Malara in Bengaluru and Arriana McLymore in Raleigh, North Carolina; Editing by Arun Koyyur, Rosalba O & # 39; Brien and Jane Wardell

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